I came across a case study about Unilever's Finance organization that I found interesting.  As Unilever continues to enhance its global Finance organization, they've chosen to focus on five principles to drive their organization forward.  Before I get into those five focus areas, here are some quick facts about Unilever (as quoted from their website at www.unilever.com)

We employ 163,000 people in around 100 countries worldwide. In 2009 our worldwide turnover was €39.8 billion.

• Our products are sold in over 170 countries around the world. In many countries we manufacture the products that we sell, while we also export products to countries where we do not have manufacturing operations.
• The top 25 brands in our portfolio account for nearly 75% of our sales.
• We are the global market leader in all the Food categories in which we operate : Savoury, Spreads, Dressings, Tea and Ice Cream. We are also global market leader in Mass Skin Care and Deodorants, and have very strong positions in other Home and Personal Care categories.
• In 2009 we invested €891 million in research and development.
• We have 264 manufacturing sites worldwide, all of which strive for improved performance on safety, efficiency, quality and environmental impacts, working to global Unilever standards and management systems. Around 50% of the raw materials that we use for our products come from agriculture and forestry. We buy approximately 12% of the world’s black tea, 6% of its tomatoes and 3% of its palm oil.

Supporting an organization like that is no small feat.  So here are their five focus areas:

1. World-class Finance processes
2. People and Organization
3. Financial flexibility
4. Dynamic performance management
5. Innovative business partnering

One of the characteristics of world-class companies is that they transform their Finance organization to spend less time and money on transactional services and devote more time to decision support.  That mindset is inherent in Unilever's focus areas.  While the term world-class can mean different things, it typically measures the performance of both an organization's effectiveness at delivering a particular process (such as Accounts Payable) as well as the efficiency in which it does so.  True world-class processes are in the top quartile of their peers as measured by geographic reach and organizational complexity.

Another focus area that has become far more important during the economic downturn is the concept of financial flexibility.  Companies are looking for ways to reduce fixed costs and outsourcing has become a leading mechanism for achieving that flexibility.  Outsourcing relationships typically transfer the fixed cost to the service provider, giving a company more flexibility in how it structures costs.

The third comment I'll make is Unilever's focus on innovative business partnering.  Traditional Finance organizations focus on controllership.  Innovative Finance organizations look for value-added ways to interact with the business units they support.  This includes more sophisticated decision support tools and processes to enrich product and customer profitability, understand underlying cost drivers and to provide additional insight into acquisition targets.

In a future post I'll discuss the focus areas of People and Organization and Performance Management.